Exporters have significantly shortened their protection against a higher NZD. Our aggregate Exporter Hedging Index (EHI) shows that exporters have run down forward cover to 5.5 months, the shortest duration in over five years. This is a stark turnaround from the middle of 2013, when exporters were maintaining a historically long level of cover at around 8.8 months (and had been doing so for over a year). This strongly suggests that our clients are expecting a weaker NZD going forward.
Read the full report: FX Research
BNZ